Fitch Ratings (Thailand) has assigned Krungthai XSpring Securities Company Limited's (KTX, AA-(tha)/Stable/F1+(tha)) two-year medium-term note (MTN) programme a senior unsecured National Long-Term Rating of 'AA-(tha)' and National Short-Term Rating of 'F1+(tha)'.
The programme has a maximum size of THB7 billion, comprising debentures and bills of exchange of up to THB3 billion and THB4 billion, respectively. Proceeds will be used for refinancing and/or working capital.
KTX can issue instruments other than senior unsecured debt under the MTN programme. However, the ratings will not apply to the other debt classes. There is no assurance that notes issued under the programme will be assigned a rating.
Key Rating Drivers
KTX's MTN programme is rated at the same level as its National Long- and Short -Term Ratings, as senior unsecured debt under the programme will rank pari passu with the company's other unsecured and unsubordinated obligations. The programme contains a financial covenant of net debt/equity of up to 4x and we expect the company to maintain the ratio well below the covenant limit.
KTX's ratings stem from Fitch's expectation of a high probability of extraordinary support from its major shareholder, Krung Thai Bank Public Company Limited (BBB+/AAA(tha)/Stable), in the event of stress. For more details on key rating drivers and sensitivities for KTX, please see Fitch Affirms Krungthai Xspring at 'AA-(tha)'; Outlook Stable
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade
Negative action on KTX's ratings would lead to similar action on the ratings of the MTN programme.
Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade
The ratings of the MTN programme will be upgraded if KTX's ratings are upgraded.
Date of Relevant Committee
23 February 2024
REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF RATING
The principal sources of information used in the analysis are described in the Applicable Criteria.
Public Ratings with Credit Linkage to other ratings
KTX's ratings are linked to the local-currency credit profile of the parent, as denoted by the shareholder bank's National Long-Term Rating.
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